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Arbitration in sexual harassment suit vs. tech venture capitalists?

Tech industry venture capital firm Kleiner Perkins Caufield & Byers LLC, which has secured capital investments for such giants as, Sun Microsystems and gaming company Zynga, Inc., is being sued for sexual harassment by a former employee.

The lawsuit claims that women at Kleiner Perkins were labeled “buzz kills” and that complaints of sexual harassment were ignored. When the woman, a partner who joined the firm in 2005, complained to a senior partner, she alleges, he told her that marrying her harasser might be the solution to her problem.

The firm dismisses her allegations, calling her an underperforming partner and claiming that she never mentioned any dissatisfaction with her treatment by male coworkers.

The lawsuit has apparently become the talk of Silicon Valley, laden as it is with questions about sexism in the tech sector and related industries. According to recent surveys, while women make up 57 percent of the overall workforce, they represent only about 25 of workers in computing occupations nationwide. In higher-level positions, the data are stark: only about 9 percent of Silicon Valley companies have female chief information officers in 2012. Worse yet, that number is heading downward — 11 percent had female chief information officers last year, down from 12 percent in 2010. 

It appears that Kleiner Perkins’s primary concern in the sexual harassment suit is that it be resolved through arbitration, which is generally thought to be friendlier to employers than jury trials.

“We expect arbitration to be a more efficient and speedier dispute resolution process,” the firm said in a statement, “than trying a matter before a jury years down the line in the San Francisco Superior Court.”

Kleiner Perkins’s initial request that the Superior Court toss the lawsuit to an arbitrator was rejected. Kleiner Perkins had argued that the woman was bound by an arbitration clause in the legal agreements governing Kleiner’s funds, but the judge rebuffed that claim, pointing out that her employer is the company, not its funds. However, the judge did agree to let the firm submit alternative arguments, and set another hearing on the issue for July 20.


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